What You Need to Successfully File Your Taxes
By: Kia Imani Robinson
The transition to adulthood can be one of the most confusing transitions of life. There is so much to learn and the new responsibilities can be very overwhelming. Filing taxes is one of those responsibilities that, despite wanting to avoid it at all costs, you can only put it to the side for so long (the deadline to file every year is April 15 although it’s April 18 this year since the 15th falls on a Saturday.) If you haven’t taken the process seriously before, now is the time and we’re here to help.
Here at The Life Currency, we want to make sure you’re equipped with proper tools and resources that will make this process as seamless as possible. Leading up to tax season, we’re conducting a tax series that is designed to answer as many of your tax related questions as possible.
We’re kicking our series off with the basics. What are the key things you need to successfully navigate the tax process? Recently I spoke with Jennifer Jackson, founder of ADLT101.com and she laid out a list of documents that most millennials will need when filing taxes. Get ready to take notes.
All of your W-2s
The W-2 form is required from each employee of an organization or company. The IRS requires employers to report the salaries of their employees and the taxes withheld from your paycheck. Your employer will provide you with your W-2 at the beginning of the year to ensure you have more than enough time to complete your taxes. If you’ve worked three jobs in 2016, you’ll need to gather all three W-2s in preparation for filing your taxes.
“This form is very popular amongst freelancers and contractors,” Jennifer explained. “If you are a freelancer or a contractor, you many have a lot of 1099s. This is going to require a lot of self-management.” The various 1099 forms help report the income you received throughout the year that wasn’t related to the salary your employer pays you. If you were a contractor at six different companies, you’re going to need to gather all six 1099 forms as you prepare to file your taxes.
Receipts from your own business-related purchases
If you own your own business, you are usually purchasing your own equipment and materials to run your particular company. Equipment/materials such as your laptop, computer software, books, proper literature and any equipment used for your business can all be written off when filing your taxes. “A lot of people don’t know this,” Jennifer shared. If you use a car to help your business thrive, this can even be written off. It is important to research the types of deductions your business is eligible for.
Receipts from any charitable donations
When you attend a charity event, they usually make it their mission to announce, “this can be considered a tax write off.” This is when those forms come in handy. You can present the receipts of all of your charitable donations when filing your taxes as one of the items you’ll be writing off this tax season.
Receipts from job-related expenses
If you’ve moved because of a job or if you have taken work-related trips, these can also be written off. “You can write your travel expenses off. It’s never explicitly stated. They never really tell you. So you’ll have to do your own research and ask questions but for the most part, those trips are tax deductible,” Jennifer advised.
Proper identification is customary when conducting any government-related business. You’ll need your social security number and valid identification to file your taxes.
Do you need a CPA or an accountant?
A CPA is a certified public accountant. ”CPAs are certified and usually have a higher level of expertise,” Jennifer explained. “It is possible to be an accountant but not a CPA.” An accountant is well-versed in maintaining the accounting affairs of businesses. A CPA must undergo various training and pass a rigorous test to obtain certification. Figuring out who should file your taxes will require research and a lot of questions. Jennifer advised that most millennials should take advantage of sites like TurboTax, H&R Block and Jackson Hewitt where they won’t charge too much to file your taxes. Some sites don’t charge at all.
Kia is a recent college graduate that's simply trying to grasp the concept of "adulting". She enjoys hugs, quotes, a good book, and all things motivational. Her favorite book is The Alchemist and she can watch Girlfriends all day long.